Fed up of Brexit talk? We want more!

Fed up of Brexit talk? We want more!

Like it or not – it’s less than a year before the UK leaves the European Union (EU). Discussion and headlines regarding the economic impact of Brexit is ramping up again up with both sides arguing their case. However, we have seen little meaningful discussion on the impact of Brexit on pensions in the mainstream media and we believe it needs to be there.

More press coverage will help to ensure that discussion on the long-term viability of funds and investments will be front of mind for trustees and sponsors. We believe it would be useful to see the government embark on an education and information campaign aimed at trustees that provides them with an indication of how their particular sector may be affected, the funding arrangements of a scheme and whether contingency plans are needed.

There also needs to be reassurance that whatever happens with investments, a long term view is required. At the time of writing, there is still a huge amount of uncertainty on the exit deal – we don’t even know if there will be a deal at all and no deal will plunge the markets into uncertainty. In this circumstance, the message to trustees and sponsors is most likely to be – hold your nerve and don’t panic.

Brexit probably poses the biggest challenge to Defined Benefit (DB) pension funds and should be on the agenda for all final salary pension schemes, particularly those which are deeply dependent on European trade and employees.

Aside from the investment scenarios, the pensions sector is still in the dark on the regulatory issues around Brexit. A new report from The CityUK says Europeans face a “looming crisis” around their personal finances if the EU and UK do not come to an agreement on cross-border contracts.

The warning is around pensions, insurance and credit contracts which will need some kind of regulatory intervention if they are to be transferred post Brexit – and already companies are frantically working to mitigate the risk. The worry is will they manage it in time and if not – what happens then to the 2 Another item to go on the Brexit list then.

Whether you are for or against Brexit – our industry should be putting pressure on the government to give pensions a higher profile in discussions.